France ‘determined’ to progress at G7 on global wealth tax

STRESA: France’s finance minister said Friday he was “determined” to advance on a global wealth tax, despite concerns from the United States and Germany and other unfinished, pending tax reforms.

“I am totally determined to move forward” on the subject, said Bruno Le Maire on the sidelines of a meeting of G7 finance ministers in Stresa, northern Italy.

On Thursday, US Treasury Secretary Janet Yellen, also attending the G7 meeting, voiced opposition to the plan that has been championed by Brazil during its presidency of the G20.

Yellen said she was opposed to “this particular formulation” that would redistribute proceeds among countries based on their exposure to climate-related damage.

German Finance Minister Christian Lindner said Friday that Berlin, too, “views the new elements of a global tax agenda with the utmost scepticism”, calling for focus on “what we have already worked out.”

But Le Maire suggested that progress on the wealth tax was possible despite opposition.

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“It was the same thing the United States said when it came to taxing digital giants,” he said, referring to an OECD plan aimed at a fairer distribution of tax revenues of multinationals.

Nearly 140 countries, including the United States, have agreed on a new international tax architecture for the biggest companies.

The first pillar aims at a fairer distribution of tax revenues, notably from US tech giants, while the second is a minimum tax rate of 15 percent on multinationals.

A number of countries have already adopted the second pillar in recent months, including at the EU level.

The OECD has set a June deadline for a joint text concerning the first pillar.

But Italian Finance Minister Giancarlo Giorgetti expressed scepticism in Stresa that this would be achieved, due to resistance from India and China.

“Unfortunately, we have a situation on hold and it will probably not be possible to find a solution to the first pillar on international taxation” by the June deadline, Giorgetti said Thursday.

“Resistance from India and China” risks missing the deadline, said Giorgetti.

Germany’s Lindner said the G7 should “work on the first pillar before adding new ideas, the substance of which would also be debatable,” referring to the wealth tax.